Moto Goldmines Limited

Moto Goldmines Limited

February 25, 2008 04:39 ET

Moto Gold Project-Completion of Underground Concept Study

PERTH, WESTERN AUSTRALIA--(Marketwire - Feb. 25, 2008) - Moto Goldmines Limited ("Moto" or "the Company") (TSX:MGL)(AIM:MOE) is pleased to report the completion of a technical evaluation to assess the underground mining potential of Mineral Resources at the Moto Gold Project (the "Project") in the Democratic Republic of Congo ("DRC"). The Project is a joint venture between Moto's subsidiaries ("Moto Group") and L'Office des Mines d'Or de Kilo-Moto ("OKIMO").

The evaluation demonstrates the significant underground mining potential of the mineral field and provides Moto with an opportunity to enhance the value of the Project by incorporating an underground mine into the existing development plan.


Following the update of the Project's Mineral Resources on February 8, 2008, Cube Consulting Pty Ltd ("Cube") has interpreted and modelled high grade Domains within the two Sessenge Deeps Lodes of the Karagba-Chauffeur-Durba ("KCD") mineralised system. The modelling was undertaken to test continuity, better represent the distribution of high grade gold mineralization within the Alteration Zone and to provide additional selectivity for underground mining methods.

The two Lodes contained within the Sessenge Deeps mineralised system were subject to an infill drilling campaign in the second half of 2007. The increased drilling density has demonstrated significant continuity of the high grade domains and has allowed interpretations to differentiate the style and/or intensity of alteration zones. The sub-Domaining of the mineralied zone is well supported by geostatistical analysis.

The benefits of selective geological modelling are expected to be significant when applied to an underground mining setting with a substantial elevation in Lode grades and an associated reduction in Lode tonnage being exhibited at economic underground mining cut-off grades. The Mineral Resource modelled outside the high grade Domains of the Sessenge Deeps Lodes was observed to be generally low grade or sub-economic for underground mining methods.

Moto intends to further develop understanding of the high grade Domains with a view to applying the selective modelling methodology to other Lodes within the KCD mineralised system.


Moto commissioned AMC Consultants Pty Ltd ("AMC") to undertake a review of the Karagba-Chauffeur-Durba ("KCD") and Gorumbwa mineralization systems, which included the selectively modelled Sessenge Deeps Lodes, to assess the potential for an underground mining operation and provide concepts and scoping level details on key elements.

Moto provided AMC with a suite of Mineral Resource models and estimates completed by Cube and reported in accordance with The 2004 Australasian Code for Reporting of Mineral Resources and Ore Reserves (2004 JORC Code). The code's reporting guidelines are equivalent to those adopted for the Canadian National Instrument 43-101.

AMC assessed these models to identify Mineral Resources that are potentially suitable for extraction by underground methods. This Preliminary Assessment considered orebody geometry and continuity, possible mining methods, indicative capital and operating costs and made allowance for the interaction between pit and underground workings.

Based on a 3.0 g/t Au cut-off grade, AMC's Preliminary Assessment concluded that the following Mineral Resources of the Project have the potential to be extracted using underground methods.

Indicated Mineral Resources 4.9 Mt @ 8.9 g/t for 1.4 Moz Au
Inferred Mineral Resources 30.7 Mt @ 6.0 g/t for 5.9 Moz Au

Moto's net attributable share, based on a 70 per cent. interest equates to 3.4 Mt @ 8.9 g/t for 1.0 Moz Au Indicated Mineral Resources and 21.5 Mt @ 6.0 g/t for 4.1 Moz Inferred Mineral Resources.

The Preliminary Assessment is preliminary by nature, in that it includes Inferred Mineral Resources that are considered too speculative geologically to have economic considerations applied to them that would enable them to be categorised as Mineral Reserves, and there is no certainty that the preliminary assessment will be realised.

These Mineral Resources are a sub-set of those reported on February 8, 2008 and have not been modified to account for any ore losses or dilution from waste rock arising during the course of underground mining.

AMC considered individual Lodes containing a Mineral Resource of less than 200 koz Au were insignificant and possibly too discontinuous for extraction by underground mining and thus excluded these from the assessment. For the KCD system alone, this material totals 4.5 Mt @ 3.7 g/t for 0.5 Moz and 3.9 Mt @ 4.0 g/t for 0.5 Moz for Indicated Mineral Resources and Inferred Mineral Resources respectively. Moto believes that with additional drilling and detailed mine planning, a portion of these Mineral Resources could be incorporated in an underground mining scenario.

It should be noted that the Mineral Resources outlined above exclude material identified for extraction in the Project's Feasibility Study published in December 2007 which focused only on surface mining.

The underground concept study considered an ultimate total ore production of 2.5 Mtpa to 3.0 Mtpa to be feasible for an underground mining complex comprising three substantial and independent mining areas. AMC concluded that due to the geometry and thickness of some of the Lodes, extraction by high productivity longhole Stoping methods incorporating Backfill would be the most suitable. Room and pillar and cut and fill methods are proposed for minor parts of the Mineral Resource.

The study suggested that development of the underground complex should be staged, commencing with decline based access and truck haulage for production. This would require minimal start-up capital infrastructure and would progressively build to a more substantial operation capable of the targeted production rates.

Moto views the deferral of significant capital expenditure associated with integrated materials handling infrastructure (haulage shaft, crushing station and associated Orepass system) to the expansion stage as being a logical development strategy in terms of capital management and the potential for the Mineral Resource base to expand over time.

Other key points of the underground concept study include:

- potential for 15-20m Stope spans (unsupported) and 20-30m Stope spans (supported) based on a preliminary geotechnical assessment using indicative parameters;

- mining operating costs estimated to be approximately US$32/ore tonne;

- mine capital development costs estimated to be approximately US$7/ore tonne;

- surface infrastructure capital costs estimated to be US$35M (total for start-up and expansion stages);

- underground infrastructure capital costs estimated to be US$36M (total for start-up and expansion stages);

- 18-24 month underground development time for main Lode ore access at KCD;

- 5-7 month underground development time for main Lode ore access at Gorumbwa; and

- an assumed metallurgical recovery of 87% (supplied by Moto and based on preliminary metallurgical test work conducted in 2007).

AMC recommended the following technical work be carried out to allow further detailed assessment of the potential of underground operations:

- additional drilling to increase confidence in spatial continuity of the high grade Lodes;

- construction of Resource models to support targeting of high grade domains;

- collection of further geotechnical data and rock property testing; and

- collection of hydrological data and groundwater structure identification.


Moto views the inclusion of underground mining operations in the Project as being complimentary to the nature of development and operations outlined in the 2007 Feasibility Study. Given the encouraging results of the selective modelling and the favourable findings of the underground concept study, Moto, in conjunction with OKIMO, intends to accelerate the acquisition of information to allow further technical evaluation of the underground mining potential and integration with the surface mining activities of the Project.

Caution Regarding Forward Looking Statements

Statements regarding Moto Goldmines Limited's plans with respect to developing the Moto Gold Project are forward-looking. There can be no assurance that any mineralization will be proven to be economic, that anticipated metallurgical recoveries will be achieved, that future evaluation work will confirm the viability of deposits identified with the project or that future required regulatory approvals will be obtained.

Risk Factors

The mineral resources data included in this document are estimates only and no assurance can be given that the estimated quantities or grades of minerals will be available to extract, or that any particular level of recovery of minerals will in fact be realised.

Moto has been formed specifically to implement the Moto Gold Project and had no prior operating history of mining production or history of putting into production development-stage mining projects and as a consequence presently has currently no free cash flow from operations. The Moto Group's ultimate success will depend on its ability to generate cashflow from its properties in the future and employ and retain an appropriately experienced workforce.

As a consequence of the notifications Moto has received from the government of the DRC and anticipates receiving, Moto may be required to enter into discussions or negotiations with OKIMO or the DRC Government regarding its rights with respect to the Moto Gold Project. No assurance can be given as to the outcome of such discussions or negotiations or that the Moto Group's security of tenure and its ability to secure additional financing in the future may not be adversely affected so as to have a material adverse effect on the Moto Group's business, operating results and financial position.

Qualified Persons

The information in this report that relates to Mineral Resources is based on information compiled by Ted Coupland and Ted Hansen who are members of the Australasian Institute of Mining and Metallurgy (AusIMM) and are qualified persons under National Instrument 43-101. Ted Coupland and Ted Hansen are directors of Cube Consulting Pty Ltd. Ted Coupland and Ted Hansen have sufficient experience which is relevant to the style of mineralization and type of deposit under consideration and to the activity which he is undertaking to qualify as a competent Person as defined in the December 2004 Edition of the "Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves" (the JORC Code). Ted Coupland and Ted Hansen consent to the inclusion in this report of the Information, in the form and context in which it appears.

The information in this report that relates to the preliminary assessment of underground mining potential and is based on information compiled by Denis Grubic who is a member of the Australasian Institute of Mining and Metallurgy (AusIMM) and is a qualified person under National Instrument 43-101. Denis Grubic is an employee of AMC Consultants Pty Ltd. Denis Grubic has sufficient experience which is relevant to the style of mineralization and type of deposit under consideration and to the activity which he is undertaking to qualify as a competent Person as defined in the December 2004 Edition of the "Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves" (the JORC Code). Denis Grubic consents to the inclusion in this report of the Information, in the form and context in which it appears.


Measurement Abbreviations

Mtpa millions of tonnes per annum
g/t grams per tonne
koz thousands of ounces
Moz millions of ounces
Mt millions of tonnes
US$ United States of America Dollars
oz ounce(s)
m metre(s)
M million
MW megawatt
kWh/t thousands of watt hours / tonne

Glossary of Terms

"Au" The Periodic Table abbreviation for the element of

"Alteration Zone", A zone of rock which has been altered from its
"Alteration Halo" or original appearance, texture, mineralisation
"Alteration" content or chemical composition as a result of the
action of subterranean thermal fluid flows during
geological events.

"Backfill" or "Fill" Material placed into underground workings for
which mining is completed. Fill is used provide
stability to underground working for subsequent
mining or to provide working surface levels for
certain mining methods. The fill can be composed
of a variety of materials ranging from
unconsolidated waste rock to an engineered fill
incorporating a cementing compound.

"Diamond Drilling" This technique involves a pipe encrusted in
industrial diamonds being used to drill through
rock layers, with a "core" of rock being left in the
centre of the pipe. The "core" of rock can be
retrieved for logging and sampling.

"Feasibility Study" A 'Feasibility Study' is a comprehensive study of a
deposit in which all geological, engineering,
operating, economic and other relevant factors
are considered in sufficient detail that it could
reasonably serve as the basis for a final decision
by a financial institution to finance the
development of the deposit for mineral production
(NI 43-101, Section 1.2 Definitions).

"Indicated Mineral An 'Indicated Mineral Resource' is that part of a
Resource" Mineral Resource for which quantity, grade or
quality, densities, shape and physical
characteristics can be estimated with a level of
confidence sufficient to allow the appropriate
application of technical and economic parameters,
to support mine planning and evaluation of the
economic viability of the deposit. The estimate is
based on detailed and reliable exploration and
testing information gathered through appropriate
techniques from locations such as outcrops,
trenches, pits, workings and drill holes that are
spaced closely enough for geological and grade
continuity to be reasonably assumed.

"Inferred Mineral An 'Inferred Mineral Resource' is that part of a
Mineral Resource for which quantity and grade or
quality can be estimated on the basis of
geological evidence and limited sampling and
reasonably assumed, but not verified, geological
and grade continuity. The estimate is based on
limited information and sampling gathered through
appropriate techniques from locations such as
outcrops, trenches, pits, workings and drill holes.

"JORC Code" The Australasian Code for Reporting of Mineral
Resources and Ore Reserves, prepared by the
Joint Ore Reserves Committee of the Australasian
Institute of Mining and Metallurgy, Australian
Institute of Geoscientists and Minerals Council of

"Lode" A mineral deposit consisting of a zone of veins,
veinlets, disseminations, or planar breccias; a
mineral deposit in consolidated rock as opposed
to a deposit contained within a gravel, sediment or
other unconsolidated environment.

"Mineral Resource" or A 'Mineral Resource' is a concentration or
"Resource" occurrence of diamonds, natural solid inorganic
material, or natural solid fossilized organic
material including base and precious metals,
coal, and industrial minerals in or on the Earth's
crust in such form and quantity and of such a
grade or quality that it has reasonable
prospects for economic extraction. The
location, quantity, grade, geological
characteristics and continuity of a Mineral
Resource are known, estimated or interpreted
from specific geological evidence and

"Ordinary Kriging" A mathematical method that uses linear
weighted combinations of the available data to
estimate unbiased block grades with the aim of
minimizing the variance of the error.

"Orepass" or "Pass" A vertical near vertical underground excavation
in rock used to transfer ore rock or waste rock
between vertically separated levels of an
underground mine as part of a rock material
handling system.

"Pre-Feasibility 'Pre-Feasibility Study' and 'Preliminary
Study" or Feasibility Study' mean a comprehensive study
"Preliminary of the viability of a mineral project that has
Feasibility advanced to a stage where the mining method,
Study" in the case of underground mining, or the pit
configuration, in the case of an open pit, has
been established, and which, if an effective
method of mineral processing has been
determined, includes a financial analysis based
on reasonable assumptions of technical,
engineering, operating, economic factors and
the assessment of other relevant factors which
are sufficient for a Qualified Person, acting
reasonably, to determine if all or part of the
Mineral Resource may be classified as a
Mineral Reserve (adapted from NI 43-101,
Section 1.2 Definitions). A Pre-Feasibility Study
is at a lower confidence level than a Feasibility

"Preliminary A 'Preliminary Assessment' means a study that
Assessment" includes an economic analysis of the potential
viability of Mineral Resources taken at an early
stage of the project prior to the completion of a
Preliminary Feasibility Study. Commonly
referred to as a scoping study, a Preliminary
Assessment may be based on Measured,
Indicated, or Inferred Mineral Resources, or a
combination of any of these. The studies may
include disclosure of forecast mine production
rates that may contain capital costs to develop
and sustain the mining operation, operating
costs, and projected cashflows.

"Probable Mineral A 'Probable Mineral Reserve' is the
Reserve" economically mineable part of an Indicated and,
in some circumstances, a Measured Mineral
Resource demonstrated by at least a
Preliminary Feasibility Study. This Study must
include adequate information on mining,
processing, metallurgical, economic, and other
relevant factors that demonstrate, at the time of
reporting, that economic extraction can be

"Qualified Person" A 'Qualified Person' means an individual who is
an engineer or geoscientist with at least five
years of experience in mineral exploration, mine
development or operation or mineral project
assessment, or any combination of these; has
experience relevant to the subject matter of the
mineral project and the technical report; and is
a member or licensee in good standing of a
professional association.

"RC Drilling" This technique employs a dual walled string of
drill rods, with a compressed air driven
percussion hammer at the end of the drill
string. The type of hammer used at Moto is
known as a "Center Sample Hammer" with a
hollow center that allows the sample to pass
into the dual wall drill pipe right at the face of
the drill bit. The rock fragments will be taken up
and will pass through hollow tubing, until the
chippings and fluids reach a "cyclone." The
cyclone separates out the rock fragments from
the drill medium and presents them to a
sampling device.

"Resource Domains" or Individual concentrations of mineralization
"Domains" separated geographically or statistically from
each other.

"Stoping" and "Stope" A process in underground mining by which ore
is extracted from its in-situ position by a variety
of methods. Stoping methods include longhole
retreat, longhole open stoping, room and pillar,
and cut and fill. The stoping process is
considered to be a production activity and
follows on from the development phase of an
ore mining area. A stope is an underground
cavern excavated during the process of stoping.

"Uniform Conditioning" A mathematical method that allows the
discrimination of ore and waste at a selective
mining unit size within an estimated panel of
significantly larger size. In theory, this provides
a more accurate prediction of estimated
resource grade above a cut off.

ARBN 113 274 874

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